FIRST SECTION

DECISION

Application no. 42480/13 YEVLAKH AVTOVAGZAL OPEN TYPE JOINT STOCK COMPANY against Azerbaijan

The European Court of Human Rights (First Section), sitting on 30 May 2023 as a Committee composed of:

Krzysztof Wojtyczek , President , Lətif Hüseynov, Erik Wennerström , judges , and Liv Tigerstedt, Deputy Section Registrar,

Having regard to:

the application (no. 42480/13) against the Republic of Azerbaijan lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 6 June 2013 by Yevlakh Avtovagzal Open Type Joint Stock Company (“the applicant company”), which has its head office in Yevlakh (Azerbaijan) and which was represented by Ms S. Jamalzade , a lawyer based in Azerbaijan;

the decision to give notice of the complaints under Article 6 § 1 and Article 13 of the Convention and Article 1 of Protocol No. 1 to the Convention to the Azerbaijani Government (“the Government”), represented by their Agent, Mr Ç. Əsgərov, and to declare the remainder of the application inadmissible;

the parties’ observations;

Having deliberated, decides as follows:

SUBJECT MATTER OF THE CASE

1. The application concerns the applicant company’s complaint of a restriction of its right of access to a court on account of the Supreme Court declaring all its claims except one to be inadmissible, and of a breach of its right of property.

2 . In 1998 the applicant company was formed as the successor to the Yevlakh bus terminal enterprise, which had been allocated a plot of land of 3 ha for its use in 1983. According to the technical passport issued to the latter, the actual size of the land in use was 2.2560 ha. The applicant company’s main activity was the sale of tickets. Roughly 30% of the company’s shares remained with the State, while the rest of the enterprise was privatised. In 2004 the shares belonging to the State were sold to a private individual by auction.

3 . On 8 April 2009 the applicant company informed the tax authorities that it would cease operating until 1 January 2014.

4 . On 1 May 2009 the Yevlakh Municipality (“the Municipality”) was issued with a certificate of ownership in respect of a plot of land of 3.5 ha, which it later sold to a private company I. The latter was issued a certificate of ownership of that land and, on 27 August 2010, the Yevlakh City Executive Authority (“the YCEA”) authorised it to construct a new bus terminal on the land.

5 . On 16 June 2010 the applicant company brought proceedings against the Auction Centre of the State Committee on Property Issues before Baku Economic Court No. 1, asking the court to invalidate the result of the above‑mentioned auction (see paragraph 2 above). On 28 July and 24 October 2010 it amended its claim, bringing an additional claim against a private company, Z., for allegedly carrying out excavation and construction works on part of the land in its use, and asking for the YCEA, the State Register of Immovable Property (which had issued the plan and measurements of the plot of land of 3.5 ha) and company I. to be joined as additional defendants. It also asked the court to declare the YCEA’s order of 27 August 2010 invalid, to annul company I.’s certificate of ownership and to order the defendants to demolish the constructions built on the land in its use and to restore the land to its previous condition.

6 . On 13 November 2010 the State Land and Cartography Committee issued a specialist report, which stated that excavation and construction works had been carried out on 0.36 ha of the land in the applicant company’s use (see paragraph 2 above).

7. On 1 January 2011 the Code of Administrative Procedure (“the CAP”) came into force.

8 . Following the remittal of the case in accordance with the rules on territorial jurisdiction, on 7 March 2012 the Shaki Administrative-Economic Court decided that the applicant’s claim against the Auction Centre (see paragraph 5 above) had to be examined in economic proceedings, while the rest of its claims had to be examined in administrative proceedings.

9 . On 9 April 2012 the first-instance court sent a letter to the applicant company apprising it of its right to clarify its claims, including those in respect of any alleged damage, and to replace them with appropriate claims.

10. On 7 May 2012 the applicant company amended its claims and asked the court, in addition to its previous claims, to join the Municipality as an additional defendant in the administrative proceedings; to invalidate the contract of sale between the Municipality and company I.; and to annul the certificate of ownership issued to the Municipality relating to the part of the land overlapping with the land in the applicant company’s use (according to it, this part of the land measured 0.714 ha).

11 . On 18 May 2012 the first-instance court in the administrative proceedings dismissed the applicant company’s claims. It found that there had been a change in the location of the plot of land indicated in the technical passport, as a part of that land belonged to company I. The applicant company still had 2.2560 ha in its use albeit with different coordinates. The court held that the applicant company did not have any ownership rights in respect of the land in its use, whereas company I. was a bona fide acquirer of the plot of land of 3.5 ha and had carried out construction work on the land it owned. The court also referred to its letter of 9 April 2012 (see paragraph 9 above), noting that the applicant had amended its claims only by bringing additional claims against the Municipality. It informed the applicant company of its right to lodge a new claim for damages.

12. The applicant company appealed, arguing mainly that the sale of the plot of land by the Municipality to company I. had been unlawful and that the domestic courts had failed to establish that the construction work had been carried out by company Z. It also argued that it had a legitimate expectation under domestic law to purchase the land on a priority basis.

13 . On 5 September 2012 the Shaki Court of Appeal dismissed the appeal, reiterating the lower court’s reasoning.

14 . Following the applicant company’s cassation appeal, on 6 December 2012 the Supreme Court, relying in particular on Articles 27, 28 and 35 of the CAP, upheld the appellate court’s judgment in part. It held that only one claim was directed against a specific defendant, namely the YCEA, and since the YCEA’s order had been issued in accordance with domestic law and the applicant company had failed to contest its validity in its cassation appeal, the lower court’s conclusion had to be upheld. As regards the remaining claims, the court declared them inadmissible, finding mainly that as a rule, it was not appropriate to bring administrative proceedings against multiple defendants and that those claims lacked precision and were unclear. It noted that it was important in each case to substantiate how one’s rights had been affected by the actions or legal acts of administrative authorities.

15 . The applicant company complained under Article 6 § 1 of the Convention that the domestic courts had not given reasons for their decisions in its case. It complained under Article 13 of the Convention that its right of access to a court had been breached on account of the Supreme Court declaring its claims (except one) inadmissible. The applicant company further complained under Article 1 of Protocol No. 1 that (i) it had been deprived of a part of its property as a result of the sale to company I., arguing that it had had a legitimate expectation under domestic law to purchase the land in its use upon privatisation; (ii) even though it still had a plot of land of the same size in its use, the land which had been “newly allocated” to it following the change of coordinates (see paragraph 11 above) was occupied by a shop and a petrol station and did not have any exit to the main road; (iii) as a result of the unlawful interference with its right to property, it had had to cease its activities; and (iv) the failure by the domestic courts to award it compensation had put an excessive burden on it. Lastly, it complained under Article 13 of the Convention that it had not had a remedy providing effective protection against the violation of its rights.

THE COURT’S ASSESSMENT

16. The Court considers that even though the applicant company relied on Article 13 of the Convention, this complaint should be examined under Article 6 § 1 of the Convention (see Rad omilja and Others v. Croatia [GC], nos. 37685/10 and 22768/12, § 126, 20 March 2018).

17. The general principles concerning the right of access to a court are set out in Zubac v. Croatia ([GC], no. 40160/12, §§ 76-79, 5 April 2018).

18 . In the present case, the applicant company had access to the domestic courts at two levels of jurisdiction, but its claims, except for one, were declared inadmissible by the Supreme Court on the grounds that the applicant had failed to comply with the procedural rules under the CAP. The Court has previously held that a particularly strict interpretation of a procedural rule may deprive an applicant of the right of access to a court (see Běleš and Others v. the Czech Republic , no. 47273/99, §§ 50-51, ECHR 2002-IX, and Zubac , cited above, § 97). The main issue in the present case is therefore whether the Supreme Court applied the procedural rules regarding the admissibility of the applicant company’s claims in a way which resulted in a disproportionate limitation on its right of access to a court.

19. The Supreme Court concluded that the applicant company’s claims, except one, were unclear. It also held that under domestic law there could be only one defendant in administrative proceedings (see paragraph 14 above). The Court reiterates that it falls in the first place on the national authorities, and notably the courts, to interpret and apply domestic law. This applies in particular to the interpretation of procedural rules by courts (see Dimovski v. North Macedonia (dec.), no. 66007/13, § 21, 17 September 2019). The Court observes that the rule cited by the Supreme Court was based on Article 37 of the CAP, which provided that several claims could be combined in one action if they were interrelated, directed against the same defendant and properly brought in the same court, and it was thus foreseeable in its application (compare Mohorič v. Slovenia (dec.), no. 316/19, § 32, 16 March 2021).

20. The Court further notes that the CAP came into force on 1 January 2011, after the applicant company had lodged its claim, and was applied to the present case. It considers such an approach to be in line with the generally recognised principle of the immediate application of procedural changes to pending proceedings (see Azyukovska v. Ukraine (dec.), no. 26293/18, § 23, 9 October 2018, with further references).

21. It is true that the first-instance court itself decided that the claims should be brought separately (see paragraph 8 above) and both that court and the appellate court examined the case on the merits. However, it cannot be said that a supreme court should be bound by an erroneous decision of the lower courts (compare Doo Vio-Mark in Insolvency v. North Macedonia (dec.), no. 50520/15, § 21, 18 June 2019). Moreover, the applicant company itself contributed to the situation at hand. While companies Z. and I. were private companies, it chose to proceed against them by joining them to its existing claims rather than lodging separate civil claims. The Court also attaches importance to the fact that the first-instance court invited the applicant company to clarify its claims (see paragraph 9 above). However, the applicant company, which was represented throughout the proceedings by a lawyer, did not make use of that opportunity and instead amended its initial claims by bringing further claims against yet another defendant – the Municipality.

22. Moreover, it appears that the fact that the applicant company’s claims were declared inadmissible without any decision on the merits did not prevent it from resubmitting those claims in accordance with domestic law. While the applicant company has, in a general manner, argued that it would not be possible to “take any further action against the same State authorities”, it has failed to put forward any substantiated arguments as to why it was impossible, at the relevant time, to lodge its claims anew in accordance with the applicable legislation.

23 . In such circumstances, it cannot be said that the manner in which the Supreme Court applied the relevant procedural rule amounted to a disproportionate hindrance of the applicant company’s right of access to a court as guaranteed under Article 6 § 1 of the Convention. It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.

24. The Government argued that the applicant company had failed to exhaust domestic remedies. They further argued that the disputed 0.714 ha of land had never been in the applicant company’s possession or use. The applicant company disagreed.

25. The Court firstly observes that a specialist report had concluded that construction work had been carried out on 0.36 ha of the land in the applicant company’s use (see paragraph 6 above). The first ‑ instance and appellate courts found that part of the plot of land in its use was owned by company I. (see paragraphs 11 and 13 above). The Court notes at the same time that, while under domestic law owners of privatised enterprises had a priority right to purchase the land underlying the property, those pre-emption rights were “claims” rather than “existing possessions” and were dependent on a decision by the relevant State authority to privatise the land (see Asgarov v. Azerbaijan [Committee], no. 52482/10, §§ 12-15 and 22-24, 16 December 2021). However, it does not find it necessary to resolve this matter, as even assuming Article 1 of Protocol No. 1 to be applicable to the facts of the present case, this complaint is in any event inadmissible for the following reasons.

26. The Court notes that only the claim against the YCEA was examined on the merits by the Supreme Court and dismissed (see paragraph 14 above). In the absence of any substantiated arguments, and having regard to its limited role, the Court finds no elements to question the Supreme Court’s finding in that respect. Therefore, the applicant company’s complaint about alleged breach of its right to a reasoned decision is manifestly ill-founded.

27. The Court further refers to its conclusions in paragraphs 18-23 above and notes that since the applicant company failed to comply with the procedural requirements of domestic law, it has failed to exhaust domestic remedies in respect of its remaining claims lodged in the domestic proceedings (compare Çiçek and Kara v. Turkey (dec.), nos. 16433/10 and 16447/10, § 63, 18 May 2021, and Gerber v. Slovakia (dec.), no. 15765/17, 9 November 2021).

28. Moreover, the applicant company did not raise the Article 1 of Protocol No. 1 complaints mentioned in subparagraphs (ii), (iii) and (iv) of paragraph 15 above in its appeals before the domestic courts. In fact, in the domestic proceedings, it had not asked for compensation but for restoration of the land to its previous state (see paragraph 5 above). As to the allegation that the applicant company had had to cease its activities as a result of the situation complained of, it appears from the case file that it stopped operating before the events described above took place (see paragraph 3 above).

29. Lastly, having regard to the above circumstances, the Court finds no separate issue under Article 13 (compare Gerber , cited above).

30. It follows that these complaints are manifestly ill-founded and must be rejected in accordance with Article 35 § 4 of the Convention.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 22 June 2023.

Liv Tigerstedt Krzysztof Wojtyczek Deputy Registrar President